Cyclone Debbie damage expected to top $1 billion

The damage bill from Cyclone Debbie is expected to top $1 billion as residents affected by the storms begin to lodge their claims.

‘I expect the insurance losses could reach into the hundreds of millions of dollars’

Insurance Council of Australia CEO Rob Whelan says the industry is well placed to handle the expected thousands of claims to be made in the following days.

“I assure NSW Premier Gladys Berejiklian and Queensland Premier Annastacia Palaszczuk that the insurance industry is harnessing its resources to help customers in a fair and timely manner,” Whelan said in a statement.

“Though 7500 claims have been lodged from Queenslanders, this is only the early stage of a natural disaster and I expect the insurance losses could reach into the hundreds of millions of dollars as householders and businesses return to their properties and lodge claims.”

Despite the widespread damage caused by category four cyclone Debbie, experts believe the total bill will be less than the one that followed category five cyclone Yasi in 2011.

"While the gross claims of the disaster will be material, net claims are likely to be manageable and below category five cyclone Yasi, which was estimated to cost about $1.3 billion," said credit ratings agency Standard and Poor’s in a statement.

The companies most likely to foot the bill are Suncorp Group, Insurance Australia Group and RACQ, who boast the largest amount of Queensland-based policy holders.

Whelan says insurance companies have sent out quick-response teams to the affected areas to help residents lodge claims as quickly and efficiently as possible.

“Insurers are already taking calls from policyholders, and many have teams standing by to enter the impact zone, assess claims and deliver assistance to their customers,” said Whelan.

“Anyone needing to lodge a claim should let their insurer know as soon as they can. The insurer can then start processing the claim, and organise any emergency repairs, or temporary accommodation where applicable.”

Insurers believe that it will be the subsequent flooding – and not the 260km/h winds – of Cyclone Debbie that will cause the most damage.

“The torrential rainfall being dumped by this system also creates the risk of flooding,” recommended Whelan.

"Fortunately, North Queensland property owners know they are highly exposed to cyclones and floods. They are more likely to be insured than most Australians and also have a higher level of coverage."

In 2011 Cyclone Yasi cost insurers up to $1.3 billion dollars, and since 2006 insurers have paid more than $3.6 billion in cyclone-related claims, and almost $3.3 billion in flood claims.